Legislation gives fairer formula on sales tax distribution

Robeson County residents should keep crossed their fingers that legislation freshman Republican Sen. Danny Britt has co-sponsored, which we believe would more fairly distribute sales tax revenues across the state, makes its way through the General Assembly and then becomes law.

As it is now, local sales tax dollars head to Raleigh, and then are returned to local governments based on a formula. Senate Bill 126 would tweak the funding formula to benefit Robeson and Columbus, which Britt represents, as well as other economically depressed counties across North Carolina.

The bill, however, is likely to face opposition as it is dividing the same pot differently, meaning that for Robeson and other poor counties to benefit, other counties must receive less money.

Under the plan, counties would be grouped into three development tiers based on four factors: unemployment rate, median household income, population growth and median house value. Robeson County would be in tier one with 40 of the poorest North Carolina counties. These counties would receive $1.10 per $1 of sales tax paid to Raleigh. The 40 second-tier counties would come out even, while the wealthiest 20 counties would keep 90 cents on the dollar of sales tax revenue.

The new distribution formula is needed out of fairness. For example, it is routine for Robeson County residents to drive to Fayetteville or perhaps Raleigh to shop retail as there are more options, or perhaps enjoy a nice dinner at a more robust menu of restaurants. If sales tax revenue were always returned to point of sales, counties such as Robeson would see local dollars flow to richer counties.

Currently Robeson County receives $1.04 for each $1 of sales tax collected in the county. The 6-cent bump seems modest, but it amounts to an increase of about $2 million a year for Robeson County. A single cent on the county’s tax rate of 77 cents for every $100 of property raises about $600,000, so the increase would amount to more than 3 cents on that tax rate.

While we don’t envision that it could lead to a property tax cut — reevaluation will give us a lower rate, but that doesn’t mean a tax cut — it might prevent a tax hike, and it would certainly provide revenue that could be put to use to meet many needs locally.

We hope that Britt, a Republican, can join with his GOP colleagues and get this legislation through the General Assembly. We don’t know Gov. Roy Cooper’s position, but he is a member of the Democratic Party, which has built itself partly on the premise of redistributing wealth in favor of the least among us. Regardless, Republicans, who grabbed power in Raleigh at least in part because of strong support from rural counties, have the power to override any veto.

If this legislation becomes law, then legislators should turn their focus to the state lottery, whose funding formula is also flawed, essentially bilking poorer counties to the benefit of the richer ones.


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